How Online Education Saves Everyone Money

Online learning isn’t just another path into the middle class. It’s also a way for the government to spend more wisely.

Peter Struck, Associate Professor of Classical Studies at the University of Pennsylvania, records a lecture by Struck on Greek Mythology in Philadelphia, Nov. 15, 2012.(AP Photo/Matt Slocum)

Three times a week, 15 weeks a semester, you can expect to see Sandra DeSousa teaching a room of 150 to 250 students the math they should have learned in high school. The adjunct professor at San Jose State University has another 100 students under her charge this spring, but she rarely sees them face-to-face.

In January, the California university entered into a partnership with Udacity, a Palo Alto-based company that specializes in providing free online courses, to develop entry-level classes in mathematics. Any student, not only those enrolled at San Jose State, can take one of the courses for academic credit. The university has its own separate online offerings, but a three-unit course can cost $1,050. The programs developed with Udacity were priced at $150.

What’s happening at 30,000-student San Jose State, the oldest public university in the West, reflects the pressures facing higher education across the country. Like other state-run schools, it is expected to provide access to as many students as possible. But in the wake of the Great Recession, taxpayers and tuition-payers are struggling to foot the bill. Deficit-ridden California has cut spending per student on higher education almost 30 percent since 2008, according to the Center on Budget and Policy Priorities, and tuition at the state’s public four-year colleges has risen 72 percent. Not surprisingly, students have found it ever-harder to obtain the diploma that’s become almost a requirement for jobs that assure a middle-class life.

Education reformers see a remedy in Internet-based tools, which they say can help more students earn college degrees at a lower cost to themselves, their families, and the government. California legislators, hoping to hurry the process, are considering legislation that would require public colleges and universities to give credit for faculty-approved online courses. Those could include some of Uda-city’s free offerings.

Online education isn’t new. But the latest technological wave could shake up traditional modes of instruction—on-screen and off—and change the way brick-and-mortar universities operate. “I really do feel like this is going to erupt in a way that is helpful to students,” said Michelle Rhee-Weise, a senior research fellow in education at the Innosight Institute, a nonpartisan think tank. San Jose State’s partnership with Udacity could be the first tremor.

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A SAFETY VALVE

San Jose State has already complemented its standard offerings with Internet-based courses that on-campus students can take for credit and with degrees that can be earned entirely online, ranging from a master’s in public health to a graduate certificate in online business analytics. More than 90 percent of public colleges already offered online courses a decade ago, according to the Babson Survey Research Group. But enrollment has soared. By 2011, 32 percent of students enrolled in a degree-granting institution were taking at least one course online.

Multiple factors are driving this shift. For starters, technology has enabled high-quality video and interactive software. Another major motivator is cost. During the past decade, the price of an undergraduate education (tuition, room, and board) leaped by 31 percent at private schools and by 42 percent at public institutions, according to federal-government figures. Seventy percent more students took out loans, the Federal Reserve Bank of New York found, borrowing an average of 70 percent more money. Even at public institutions, historically able to offer an affordable education, tuition has risen uncomfortably high as state and local funding has shrunk by 21 percent per pupil over the past 10 years.

State governments see online programs as something of a safety valve, allowing them to serve more students without raising taxes, said Michael McPherson, president of the Chicago-based Spencer Foundation, which finances education research. The potential for savings prompted a group of governors in the late 1990s to create the Western Governors University, an all-online institution that now serves 38,000 students, mainly working adults looking to advance their careers.

Cash-strapped schools have used online degree programs to subsidize on-campus student services or to expand the capacity of oversubscribed classes. But until recently, online education lacked the academic prestige or a critical mass of innovators to prove that its tools are more than just a safety valve and that they can fundamentally improve the way colleges teach.

“The fact that Stanford and Harvard and MIT and others have gotten into the game has sort of changed the equation,” said Jamie Merisotis, president of the Lumina Foundation, which encourages access to higher education. Big-name schools have spent millions of dollars developing educational software and publishing lectures and course materials—known as Massive Open Online Courses—available to anyone on the Internet. Colleges as varied as Bryn Mawr and the University of California (Berkeley) are blending online materials with classroom instruction. Online learning, Merisotis said, “started off on the margins, and now it’s moving towards the center.”